Kinross Gold: 2Q18 results show continued strong first half performance

Production

Kinross reportedly produced 602 049 attributable Au eq. oz. in the second quarter of 2018, compared with 694 874 Au eq. oz. in the second quarter in 2017.

Production cost of sales

Production cost of sales per ounce of gold (Au) sold was US$767 for the second quarter of 2018, compared with US$660 for 2Q17. This can mainly be attributed to higher cost of sales per ounce sold at Fort Knox and Tasiast.

Production cost of sales per Au oz. on a by-product basis was US$754 in 2Q18, compared with US$645 in 2Q17, based on 2Q18 attributable gold sales of 574 444 oz and attributable silver sales of 1 035 675 oz.

All-in sustaining cost

All-in sustaining cost per ounce of Au sold was US$1018 in 2Q18, compared with US$910 in 2Q17. All-in sustaining cost per Au oz. sold on a by-product basis was US$1011 in 2Q18, compared with US$901 in 2Q17.

Revenue

Revenue from metal sales was US$775.0 million in the second quarter of 2018, compared with US$868.6 million during the same period in 2017, due to a decrease in gold equivalent ounces sold, partially offset by a higher average realised gold price.

Average realised gold price: The average realised gold price in 2Q18 increased to US$130/oz, compared with US$1260/oz in 2Q17.

Margins

Kinross’ attributable margin per Au eq. oz. sold was US$539 per Au eq. oz. for the second quarter of 2018, compared with the 2Q17 margin of US$600 per Au eq. oz.

Operating cash flow

Adjusted operating cash flow was US$231.5 million for the second quarter of 2018, compared with US$230.8 million for 2Q17.

Net operating cash flow increased to US$184.5 million for the second quarter of 2018, compared with US$179.7 million for 2Q17.

Earnings

Adjusted net earnings was US$37.8 million, or US$0.03 per share, for 2Q18, compared with adjusted net earnings of US$54.9 million, or US$0.04 per share, for 2Q17.

Reported net earnings was US$2.4 million, or US$0.00 per share, for 2Q18, compared with earnings of US$33.1 million, or US$0.03 per share, in 2Q17. The decrease was mainly due to lower margins.

Capital expenditures

Capital expenditures increased to US$247.1 million for 2Q18, compared with US$200.7 million for the same period last year, mainly due to increased spending at Round Mountain and Bald Mountain.

President and CEO of Kinross, J. Paul Rollinson, commented: “Our portfolio of mines performed well during the quarter, contributing to a strong first half performance. As a result, we remain on track to meet both our annual production and cost guidance. We achieved solid cash flow and maintained our strong balance sheet as we continued to advance our development projects across the company.”

“At Tasiast, construction was completed at the phase one expansion, with first ore now through the SAG mill. The project has been transferred to Operations and is in the final stages of commissioning. We have decided to pause activities at phase two and, to maintain optionality, are analysing alternative throughput approaches to expand Tasiast as we continue to engage with the Government of Mauritania regarding our activities in the country. The completion of our evaluation of alternative approaches, and a phase two re-start decision, are subject to our ongoing engagement with the Government. We remain committed to disciplined capital allocation as we seek additional clarity on the matter.

“Our projects in the US continue to make excellent progress, as the Fort Knox Gilmore, Round Mountain Phase W and Bald Mountain Vantage Complex projects remain on budget. We have also initiated a feasibility study for the La Coipa Restart project, and a scoping study for Lobo Marte, to potentially return to production in Chile. In Russia, we expect production to commence at the Moroshka satellite deposit near Kupol early in the fourth quarter.”

See full results here: http://www.kinross.com/news-and-investors/news-releases/press-release-details/2018/Kinross-reports-2018-second-quarter-results/

Read the article online at: https://www.globalminingreview.com/finance-business/06082018/kinross-gold-2q18-results-show-continued-strong-first-half-performance/